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(i) Critically examine the effectiveness of various approaches that may be used to reduce macroeconomic instability. Your answer should identify and show an understanding of the various policies that a country's government and/or central bank may use to achieve generally accepted macroeconomic goals. You are also encouraged to suggest your own ideas as to what should be done to more effectively attain desired macroeconomic goals. In your answer, you should explicitly identify macroeconomic goals that governments generally pursue. Are these the most important or do you think governments should aim to achieve other goals?
(You are encouraged to make use of aggregate demand/aggregate supply analysis.)
(ii) Some people (especially economists) argue in favor of international free trade while others favor protectionism. Critically examine who gains and who loses from free trade and protectionism. Overall do you think that international free trade is a good idea?
Helen’s preferences over CDs (C) and sandwiches (S) are given by U(S, C) = SC +10(S +C), with MUC=S +10 and MUS= C +10. If the price of a CD is $9 and the price of a sandwich is $3, and Helen can spend a combined total of $30 each day on these goods,..
c q2 50q 81 1determine the range of prices for which the firm incurs a loss but continues to produce. 2determine
Suppose you manage a United States based firm that makes shoe laces that you sell in a highly competitive market your shoe laces are considered a standardized commodity through your consumers
A firm in a perfectly competitive market invents a method of production that lowers marginal costs. What happens to output What happens to the price it charges A. The firm has an employee who threatens to tell all other firms in the industry about..
suppose the economy has a natural rate of unemployment of 5.a. suppose short-run output over the next four years is 1 0
Choose a market for a good in your area that seems to be a perfectly competitive market. Write four or five substantive paragraphs that describes the market and answers the following questions: Identify the buyers and sellers as well as the goods o..
Consider the following supergame: N firms choose prices simultaneously in each period. The discount factor is per period. Suppose firms try to collude at the monopoly price with the threat of practicing price equal to marginal cost for T periods ..
Calculate the number of days it would take for the vendor to no longer need to borrow money in order to purchase $10 of vegetables and the day number on which no loan is needed?
The Arena Corporation, which sells engines, has a uniform value of $500, which is charges all its consumers. But, after its competitors begin to cut their rates in the California market to $400, Arena decrease its price to $400.
The loan office of the bank has just called Ms. Firth to mention another financing possibility-the graduated payment mortgage. Terms, interest rates, and fees are the same as a normal mortgage. However, by lowering the payments in the early years,..
Suppose that the economy is initially at equilibrium, in which total planned real expenditures equals real GDP. Which of the following will occur if there is an increase in autonomous investment?
Find the taxi firms profit maximizing or loss minimizing output level, Q. Calculate the monopolist's total profit. What is the monopolist's average profit?
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